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Why keep bonds in your RRSP

Bond interest is taxed at a higher rate

Most Canadians can’t afford to maximize their yearly RRSP or TFSA contribution limits, but if you can, here are two things you need to know: 1) Financially, you’re doing great. 2) You need to be really careful about which investments go outside your RRSPs and TFSAs. Keep in mind that the investment interest you get from bonds and GICs is taxed at a higher rate, so in general, put your fixed-income investments in the tax shelter, and keep your stocks and dividend payers outside.

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